Neil Woodford and partner received £20m dividends amid crisis
Former star stockpicker Neil Woodford and his business partner Craig Newman reportedly raked in dividends close to £20m in the last financial year as the crisis that would lead to the closure of their investment firm escalated.
The figure, which covers the year to March 2019, is based on analysis by the Financial Times.
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The calculation is based on an average fee of 0.5 on the £12bn of assets the company had under management at the end of that year, which the paper said had been confirmed by people familiar with Woodford Investment Management’s accounts.
Woodford and Newman, the company’s co-founders, received dividends of £98m between 2014 and 2018.
Woodford Investment Management was shuttered earlier this month after Woodford was fired from his flagship Equity Income Fund (WEIF), which had been suspended since June, and quit as manager of two others.
The process of winding up WEIF is set to begin in January, while it was announced last week that Schroders have been appointed to take over the running of listed investment trust Woodford Patient Capital.
Woodford came under fire from politicians and regulators for continuing to charge management fees after WEIF’s suspension in June. The company received £65,000 a day in fees from the frozen fund, totalling over £8m by the time it was closed earlier this month.
The FT said its analysis assumed that Woodford Investment Management’s expenses and tax rates were in line with the previous financial year, and that there were no additional large one-off items during the 2018/19 year.
In 2016 Woodford and Newman restructured their business to allow them to be paid in dividends, reducing their personal tax bills.
Profits from Woodford Investment Management are transferred to a second firm, Woodford Capital. The pair are Woodford Capital’s sole directors, and Woodford himself owns two-thirds of the firm.
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Woodford Investment Management declined to confirm the dividend figures or comment on the reports.
The company’s results for the year to 31 March are due to be published in late December or early January.
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